Educational Savings Account (ESA) program to provide high-quality education

(Andy Matthews of NPRI) – I caught this news story from Channel 3 Las Vegas the other day, spotlighting Gov. Sandoval’s efforts to win legislative support for his record-breaking tax-hike plan. The centerpiece of that plan is a massive new tax on businesses, revenues from which would predominantly be funneled into Nevada’s broken K-12 education system.

Getting his plan through the Legislature will require support from members of both parties, and, with that no doubt in mind, the governor took the novel approach of inviting three of his gubernatorial predecessors — Democrats Robert Miller and Richard Bryan and Republican Robert List — to testify in support of his proposal this week. Lamenting the state’s dismal educational performance, Gov. Sandoval cast his plan as an overdue and forward-looking solution to a problem that has been allowed to persist for far too long. Thus, his pitch’s pithy punctuation point: “It simply is not 1960 anymore.”

That’s true — it’s not 1960 anymore. And much indeed has changed in the past 55 years. To give just one example, Nevada’s public education system in 1960 spent $3,144 per pupil in today’s dollars. Fast forward all the way to 2011, the most recent year for which data is available, and that number had increased to $9,313. That’s quite a change indeed.

But wait a minute. Come to think of it, maybe what those numbers suggest is that, at least when it comes to addressing Nevada’s educational challenges, nothing has really changed at all. In fact, that may well be one of the few constants over the past 5½ decades. If you were to take Doc Brown’s DeLorean back to 1960, kidnap someone and bring him to the present day, he’d find much of the modern world unrecognizable. But he’d also find that when it comes to public education, we’ve been taking more or less the same approach over the past 55 years. What the dramatic increase in per-pupil spending really shows is that for all that time, education policy has been based on the premise that spending more money will yield better results.

So while Gov. Sandoval’s sales approach may well have been novel, the substance of his plan is anything, but what he’s proposing — tax hikes to pay for education spending increases — is the same idea that has been tried, unsuccessfully, since before the governor was even born. Viewed in that light, the continuity suggested by the presence of governors Miller, Bryan and List really was a nice touch.

Fortunately, there is an effort in the works that would come at our educational problems from a new perspective. Senate Bill 302, which would establish an Education Savings Account program, was introduced on Monday, and if signed into law would provide reason to genuinely believe our education system may finally be on the road to improvement.

NPRI introduced the idea of ESAs in our Solutions 2015 publication, and as we explained there:

ESAs are private accounts held by individuals from which beneficiaries can make certain approved purchases for educational reasons. These include private‐school tuition, online education, textbooks, transportation costs or private tutoring.

In other words, instead of the state just sending money to public schools, where those funds are then spent on the students who enroll there, the money would follow the students who opt into the program. Those students and their parents would then be able to use that money to shop around for the school or even school type that is the best fit for them as individuals, while students who choose to remain in the traditional public system would benefit from the academic improvements seen when schools are forced to compete.

It’s a basic fact of economics that competition breeds quality. That’s the case all throughout the private sector, and it would be the same in our education system as well. ESAs would create a true marketplace where schools would compete for students, and the way to thrive in any marketplace is to offer a product good enough for people to want to buy it. Schools would have a powerful incentive to provide high-quality education, because failing to do so would mean their students (and their tuition dollars) would head elsewhere.

Those competitive dynamics, sadly, have been lacking in Nevada’s education system, and the results have been tragic for Nevada’s children. SB302 provides the best hope our students have had in a long, long time, and Sen. Scott Hammond, the bill’s sponsor, deserves an enormous amount of credit for showing bold leadership on this issue.

To his credit, Gov. Sandoval’s education plan does include a school choice measure. Via Assembly Bill 165, the governor seeks to create a tuition tax-credit scholarship program, which is a good (albeit modest) step in the right direction. Still, the thrust of the governor’s proposal is on the tax-and-spend side of the equation, and 55 years of history make clear where that will get us.

If the governor is serious about improving Nevada’s education system, and leading us beyond our history of failure, he should make it a high priority to ensure that SB302, the Education Savings Account bill, becomes law, and that AB165 is expanded when he signs it into law.

NPRI is a nonprofit, nonpartisan think tank that produces and shares ideas and information that empowers people.  For more information, please visit www.NPRI.org.